Mexican stocks end firmer

Mexico's stocks rose on Friday after the central bank said it would activate a $30 billion swap line with the US Federal Reserve this month to aid Mexican firms. The government's benchmark 10-year peso bond rose 0.21 of a point in price, pushing its yield down 3 basis points to 7.68 percent.
The benchmark IPC stock index closed up 1.81 percent at 20.933.78, led by a 2.62 percent gain at top retailer Wal-Mart de Mexico to 36.49 pesos. Copper miner Group Mexico rebounded as the company said it would appeal a US court decision issued on Wednesday ordering it to surrender part of its stake in Southern Copper to Arizona-based Asarco LLC.
Group Mexico jumped 8.39 percent to 10.08 pesos, after losing 15 percent on Thursday. UBS said Group Mexico stock looked cheap even if it was unable to win the case. "Under the proposed order, Group Mexico would still be trading at a 42 percent discount to the market value of its assets, which we view as high," UBS wrote.
Shares in embattled cement maker Cemex, which is struggling under a mountain of debt, lost 1.18 percent to 10.07 pesos. The company's stock had risen nearly 64 percent since March 9 amid speculation that the government would help the company meet its looming debt payments. The peso currency gained 1.29 percent to 13.5675 per dollar at the central bank's final reference, marking its fifth session of gains.
The peso has rallied more than 14 percent since hitting a 16-year low on March 9. In a widely anticipated move, the central bank said it would activate the swap line and auction $4 billion on April 21 to aid firms struggling to obtain dollars to meet debt payments.
"This will provide a lot of liquidity," said Ramon Cordova, a trader at Base Internacional brokerage in Monterrey. "The tendency of the peso is changing; all the estimates for the peso ending the year above 14 are wrong, everyone will be revising estimates now."
The decision to activate the swap comes only days after Mexico said it would request a $47 billion credit line with the International Monetary Fund to bolster its reserves position. "The latest positive performance seen on the peso is a very positive omen for future monetary policy," Alberto Bernal, head emerging markets strategist at Bulltick Capital Markets, wrote in a report. Bernal expects a 100-basis-point cut at the central bank's meeting on April 17.